Origination and History of Balanced Measures Approach

The City of Phoenix began developing and implementing performance measures in 1990. The effort was, and still is, coordinated through the City Auditor’s office. Phoenix’s interest in performance measurement at the time was in part fueled by their interest in total quality management practices and the Government Accounting Standards Board’s (GASB) Service Efforts and Accomplishment (SEA) program. In 1990 five departments began the process of defining and reporting on a set of performance measures. Each subsequent year an additional five departments followed suite, until by 1995 all 25 city departments were in some way implementing performance measurement. Despite having been engaged at some level in performance measurement for almost ten years, one official described their efforts as still essentially in the "toddler" phase. Many of the outcome measures are still focused on activities, and there is much to learn and improve upon to make their measurement effort a more systematic, useful component of their decision making and resource allocations.

What are they doing and who is involved in process.

Phoenix is not pursuing a balanced scorecard approach to performance measurement in the more formal sense. That is, they do not categorize measures according to the four "perspectives" typically associated with a balanced scorecard: financial, customer, internal business processes, and learning and growth. Instead, they have given their 25 departments considerable flexibility in choosing the performance measures, and how many measures, that are most useful for their particular needs. These measures focus on one four performance aspects: 1) customer/citizen satisfaction, 2) unit cost/efficiency, 3) cycle time, and 4) mission accomplishment. The most emphasized of these is customer/citizen satisfaction. Given the leeway granted to departments in defining and using their own measures, not every department decides to use measures focused on each of these four aspects.

How are they using balance measures and why is it valuable to the organization.

Phoenix uses performance information essentially for two purposes: 1) to communicate the performance information to elected officials and the public, and 2) as criteria in city managers’ personal performance achievement plans. The use of performance data for quality improvement efforts occurs on an ad hoc basis at the departmental level, and is typically used after program improvements are identified through other means.

The City of Phoenix’s performance measurement effort has provided value to the city in the following ways:

The city is much more able to effectively respond to information requests from elected officials, citizens, and other stakeholders since they began to regularly track performance data. Prior to implementing their measurement system, performance data was collected on an "ad hoc" basis, making quality responses to information requests more difficult.

Overall citizen satisfaction and support continues to be high and has improved for the past five years. While difficult to attribute this directly to the city’s performance measurement efforts, the interviewee believed that it has played some role.

The regular measuring of performance has created and supported a work environment in which improvement and results matter. While performance data cannot always be tied directly to innovation and improvement efforts, this general environment is consistent with one of Phoenix’s core values -- a focus on results.

Lessons learned to be shared with others undertaking this approach.

Two of the more significant lessons learned concern the decentralization of Phoenix’s approach and the frequency with which data can be used. In regard to the former, the city’s first foray into performance measurement was characterized by a relatively top-down, centralized approach. This included mandates on how to define measures and in some cases which measures to use. City management quickly encountered stiff resistance to this approach and has since pursued the more flexible, department-driven approach described above. Asking departmental managers to use only those measures they perceive to be functional in their particular context has facilitated both city-wide buy-in and the use of more relevant measures. According to the interviewee, had the city not shifted their approach and continued with a top-down strategy, the city would likely have had little success with performance measurement.

In regard to the second key lesson learned, city staff have recognized that certain data can only be collected on an annual or even longer-term basis. In these cases, city staff have been forced to view performance from a longer-term perspective, and to modify their expectations and planned use of the data accordingly.

Potential obstacles or barriers and how they dealt with them

See above for discussion of barrier created by initial top-down, centralized approach and how city dealt with this issue.